The South African lender will acquire majority of assets and liabilities of Ubank, along with its employees on a going concern basis, upon closing, but not the Ubank legal entity, which will hold the remaining assets and liabilities
African Bank to acquire majority of Ubank. (Credit: aymane jdidi from Pixabay)
African Bank, a South Africa-based retail bank, is set to acquire certain assets and liabilities of Ubank, previously known as Teba Bank, for a total consideration of $4.7bn.
The South African lender will acquire majority of assets and liabilities of Ubank, along with its employees on a going concern basis, upon closing of the proposed transaction.
African Bank said that it will not acquire the Ubank legal entity, and the remaining assets and liabilities will be held by the Ubank legal entity.
The proposed acquisition supports its strategy of building a scalable, diversified and sustainable banking business with a convincing proposition.
The market position and distribution footprint of Ubank within the mining sector will complement its existing national offering, said the South African lender.
African Bank CEO Kennedy Bungane said: “Ubank’s strong retail deposits, transactional accounts and partnership with MTN’s Mobile Money, will accelerate the diversification and scaling of African Bank in line with our mission to build a customer-centric, digital and data-enabled business that is diversified, scalable and sustainable.”
Upon closing of the acquisition, Ubank’s customers will be migrated to African Bank’s MyWORLD product, which offers personalised, and competitive value at low cost.
With the acquisition, the Ubank customers will benefit from immediate access to African Bank’s nationwide distribution footprint, said African Bank.
Established in 1912, Ubank is a South African financial services provider with a strong presence across select mining and rural communities.
The bank continued to operate in the ordinary course of business, until it has been placed under curatorship on in May this year.
In May this year, African Bank acquired 100% of Grindrod Bank in a transaction valued at R1.5bn ($88m), an existing corporate and SME client base.